In recent weeks, analysts and economists have started expecting the U.S. Federal Reserve to raise interest rates sooner. This has strengthened the dollar, and helped drive down gold. However, Tuesday's relative dollar weakness, coupled with the expected actions of other central banks, has helped send it up again.

Gianluca Colla | Bloomberg | Getty Images

A cyclist rides past the Swiss National Bank's headquarters in Bern, Switzerland.

The Fed is not the only central bank which could swing the price of the precious metal. There could be a short-term boost to the price if Swiss voters back a proposal for the Swiss National Bank (SNB) to boost its gold holdings and stop any further selling of Swiss gold. The vote is on November 30.

There is also the possibility that the European Central Bank uses gold-buying as one of its unconventional monetary policy measures – mooted by Luxembourg's Yves Mersch on Monday.

India's central bank may increase curbs on gold imports, according to a Reuters report Tuesday.

If imports to the world's second-biggest gold consumer were limited, there could be additional pressure on the gold price.

Gold is expected to continue its steady decline in the longer term, with analysts at Goldman Sachs predicting COMEX gold will fall to $1,195 per troy ounce in the next 3 months, and $1,050 over the next year, in a research note published on Monday.